MI: Legal Impasse Puts Detroit Medical Marijuana Ordinance On Hold

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Detroit’s medical marijuana ordinance went into effect last week, but legal proceedings between potential business owners and the city have brought the new industry to a halt in the city.

The suit, by a business group, which claims they were denied a permit because it violated the city’s old ordinance, has caused the city to put everything on hold until the legal matter is resolved.

“It would be improper, administratively wasteful and confusing to the public to implement the initiatives or take any action pertaining to permitting or licensing of marijuana facilities while the litigation is pending in Circuit Court,” said deputy city corporation counsel Charles Raimi in a memo to city officials on Friday. “Until further notice, the initiatives shall not be implemented and no City department may accept, process or approve any applications for a permit or license for any medical marijuana facility or medical marijuana caregiver center.”

Left in the lurch are dozens of entrepreneurs who want to gain entry into the lucrative medical marijuana business and tens of thousands of medical marijuana card holders, who use the medical pot to treat a variety of ailments. In Wayne, Oakland and Macomb counties, 100,581 people have medical marijuana cards.

The state began accepting applications Dec.15 for medical marijuana licenses in five categories — growers, processors, testing facilities, secure transporters and dispensaries. Since then, 18 people or businesses have submitted completed applications that include approval from the city where they want to operate. None of those have come from businesses that want to open up shop in Detroit. Another 86 have filed pre-qualification applications, which allows the state to complete background checks on the business owners while they wait for approval from municipalities.

In Detroit, about 60 dispensaries are operating with some sort of approval from the city under the old ordinance. But none have gotten permission from the city under the new ordinance, which was passed by voters in November. Those dispensaries are in jeopardy of closing after a state-imposed Feb. 15 deadline to submit applications.

“All the dispensaries operating in the city are going to have to shut down,” said Amir Makled, an attorney who represents the Advanced Wellness dispensaries in Detroit. “Everybody who is a card holder in Detroit is going to be impacted.”

Without approval from the city, medical marijuana business owners can’t complete an application to get a license to operate from the state. And the dispensaries that are operating under emergency rules — about 10 that have gotten approval under Detroit’s old ordinance and about 50 more who were going through the permit approval process — may have to shut down by Feb. 15 if the issue isn’t resolved before then.

If they don’t shut down after Feb. 15, they put their chance of getting a state license at risk.

“Applicants who are currently operating under the temporary operation aspect of the emergency rules must apply for a state license by Feb. 15, 2018,” said David Harns, spokesman for the state department of Licensing and Regulatory Affairs. “If an applicant can’t include a completed attestation from their local clerk’s office that authorizes their temporary authorization, then their continued operation after February 15 may be used as a reason for denial of a state operating license.”

Michael Stein, a Bloomfield Hills attorney for between seven and 10 businesses hoping to get a medical marijuana license in Detroit, has filed for injunctive relief when his clients were denied approval from the city because they didn’t meet zoning requirements under the old ordinance. The old rules in Detroit required that medical marijuana facilities could not be within 1,000 feet of another dispensary, church, day care center, school or park.

But when the voters approved two new medical marijuana ordinances in last November’s election, the distance between dispensaries and churches was reduced from 1,000 to 500 feet and allows dispensaries to operate near schools, day care centers and parks.

“Under the new ordinance, my clients don’t need a variance. They qualify now,” Stein said. “We need to get them to accept these applications because the city voted overwhelmingly for these ordinances.”

He contends city officials, many of whom opposed the new ordinances, welcome the lawsuit because it gives them an excuse to challenge the new ordinances.

“Their plan all along was to not take the applications so no one could stay open,” he said. “But the new ordinance gives the clear direction that they have to take the applications.”

But because the matter is pending in court, before Circuit Court Judge Robert Colombo, the city decided not to implement the ordinance, which was supposed to go into effect on Jan. 4. The city declined to comment further on the lawsuit.

Jonathan Barlow, spokesman for Citizens for Sensible Cannabis Reform which advocated for the ordinances passed by voters, said the medical marijuana patients are at the biggest disadvantage because of the potential for losing access to medical weed after Feb. 15.

“This just does a great deal of harm for all the stakeholders,” he said. “Hopefully we can find a solution before the 15th.”

Makled said there is plenty of blame to go around on the issue. But much of the fault lies with the Michigan Legislature, which let the business operate in a muddled gray area from 2008 when voters overwhelmingly legalized medical marijuana until last year when they finally passed a law which will regulate and tax the industry.

What resulted was a mishmash of enforcement, with some cities allowing dispensaries to operate unfettered and others where dispensaries and people growing marijuana for patients were routinely busted by police.

“The city from early on allowed these entities to come in and operate without any clear understanding of what the state laws were,” Makled said. “Everybody was operating in a gray zone.”

For now, Detroit’s website, which had included a detailed interactive map of medical marijuana facilities in the city, shows only a stark message:

“Proposals A and B passed by the voters in the November 7, 2017 election effectively repealed the City’s medical marihuana caregiver center program. New applications for medical marihuana caregiver centers are no longer being accepted. BSEED will begin accepting applications for medical marihuana facilities in early 2018.”